Iraq, Exxon hold talks over uncertain oil contracts

23 Jan 2013

Exxon Mobil, Baghdad at odds over the Kurdish contracts
The prime minister of Iraq was asked by Exxon Mobil if it can keep continuing a giant southern oilfield in spite of divergences over the rival deals signed with the country’s independent Kurdistan region, the government said on Monday (21st January, 2013).
Shi’ite premier Nuri al-Maliki and Exxon’s top executive had meeting in-person in Baghdad come as the US main offers of selling its stake in the West Qurna -1 oilfield in the south after conflicting with Baghdad over its contracts with the self-governed Kurdish enclave in the north.
Iraq has been clear it considers contracts oil companies such as Exxon signs with the Kurdish enclave illegal. But he meeting may suggest that Exxon is testing its room for balancing investments with OPEC-member’s central government and those with the self-ruled Kurdistan region.
Exxon Mobil asked for meeting with the prime minister to know his opinion on the company’s deals in the south and in the northern region and if there was any probability to keep working on both deals, Ali al-Moussawi, the media adviser of Maliki, said after the meeting.
The prime minister answered clearly to the Exxon head that they cannot keep operating on both contracts at the same time and they should observe the laws of Iraq.
A statement from the government said only that Exxon Chief Executive Rex Tillerson had expressed that his company has keen interest in continuing and expanding its business in Iraq.
The Iraqi officials had said late last year that China National Petroleum Corp., or CNPC had emerged as the favorite in negotiations for taking over the 60 $ stake of Exxon in the $ 50 billion the West Qurna -1 project.
The Arab-led central government of Iraq and the Kurdistan Regional Government run by ethnic Kurds are caught in a disagreement over control of the oil profits, oilfields and territory that is testing the federal union of Iraq.
The government of Iraq says it alone has the constitutional power of exporting crude oil and sign agreements, but the Iraq’s Kurdistan says that the constitution gives permission it to agree to deals and transport oil independently of Baghdad.
Attempts of resolving the dispute have failed in part due to the disagreements over a long-delayed gas and oil law meant to set a clearer structure for managing the country’s vast oil reserves, which is the fourth biggest one in the world.
Source: [Reuters]